Can we be nudged towards a Big Society?

The report in today’s Guardian that Windsor and Maidenhead council are exploring “reward points” as a means of encouraging locals to engage in “Big Society” activities is intriguing. This comes shortly after news of the possibility of importing a version of the Japanese system of time-banking for voluntary adult social care. One of the imponderables of the Big Society agenda is how you animate civil society to step into the void created if and when the State withdraws from service provision. Has Windsor and Maidenhead hit on a potential solution? I think we need to be cautious.

Reward points feel like a very twenty-first century way to go about dealing with the issue. Windsor and Maidenhead claim their thinking is informed by “nudge theory”. Again, this feels very contemporary. There is now a behaviour change unit at the heart of government which claims to draw inspiration, in part, from Thaler and Sunstein’s work Nudge.

However, this idea hasn’t really got anything to do with nudge theory, as far as I can see. Nudge theory is about designing choice situations in a way that recognises the systematic biases in human cognition. It seeks to achieve a better social outcome, without constraining individual choice, by intentionally presenting choices in particular ways. Hence, the well-known prescription to make the default option in any choice the socially preferred option. This takes account of the status quo bias in decision making. It means requiring consumers to, for example, consciously opt out of joining a scheme such as an occupational pension scheme. Many people will not bother to opt out, or take the default option to indicate the norm, and will go with the default of joining the scheme. The result is higher uptake of pensions and less poverty in old age. This also addresses the problem of time-inconsistent preferences. As a youngster you might want to spend all your spare cash on beer, but your older self will wish you’d had the foresight to put the money into a pension.

The Windsor and Maidenhead proposals have much more to do with good old-fashioned economics. Reward points can be exchanged for goods and services – that is their point. So offering points changes the relative price of different ways to use your time. This will lead some households to reallocate time towards “Big Society” activities.

In relation to the development of this scheme the Guardian quotes the Conservative leader of Windsor and Maidenhead as saying “Anything that works, we’ll give it a go … we would see no reason why we couldn’t …. extend that reward approach to promoting … positive activity”.

There is an interesting logistical question here. If reward points are to act as an incentive to reallocate time then they will presumably have to be worth something meaningful. The task is harder than collecting loyalty points in a supermarket. In the case of supermarkets the aim is simply to keep you coming back to a specific supplier, not to get you to shop for food in the first place. But the more the reward points are worth the less attractive the scheme will be to those organisations that are going to be expected to redeem them for goods and services without out-of-pocket payment by the consumer. Whether it is possible to calibrate such a system to generate sufficient Big Society activity while still being commercially viable will be an interesting challenge.

A more important point, if we are seeking to put the Big Society on a sustainable footing, is whether reward points tap into the right sort of motivation. Or whether this sort of approach could be counterproductive. If it could be counter-productive then we need to be very cautious about “giving it a go” to see what happens.

Nudge theory is part of the behavioral economics literature. Another concern in that literature is the distinction between extrinsic and intrinsic motivation. Extrinsic motivation is basically the availability of some form of external reward for an activity – such as getting paid a wage for giving up an hour of your time. Intrinsic motivation is the positive psychological impact of engaging in an activity. That may be a warm glow associated with helping others, the sense of a moral duty fulfilled, or the satisfaction of a job well done. Someone who is intrinsically motivated doesn’t need any external reward for engaging in an activity. Those oriented towards extrinsic motivation will only do the job as long as there is an external reward.

There is evidence that extrinsic motivation can destroy intrinsic motivation. Where someone doing something “for the love of it” is given additional extrinsic motivation then the extrinsic motivation tends to crowd out the intrinsic motivation. The activity is “debased” and the person becomes more instrumental in their attitude. In this situation the withdrawal of extrinsic reward does not return us to the status quo ante, rather it leads to people cutting back or stopping the activity. The intrinsic motivate is not resilient and recovered. This evidence suggests that we should be cautious about layering on extrinsic motivation to increase effort. I’m not aware of any similarly strong evidence that suggests that extrinsic motivation fosters intrinsic motivation, as opposed to encouraging greater work effort. But intrinsic motivation will surely be a stronger and more sustainable basis for building the Big Society.

So it may be that offering reward points will have the desired effect. And perhaps once people engage in Big Society activities they will discover intrinsic motivation. New social norms for a more engaged and active civil society will be established. But I’m not convinced it will play out in that way. I am all for volunteering and a strong civil society, but for a range of reasons I remain sceptical about the Big Society agenda as a solution to the problems facing government. I offered some further thoughts here.